Comments on the Greek referendum

2015-06-27

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With Greek Prime Minister Alexis Tsipras having already confirmed his willingness to call for a referendum on Greece’s bailout programme, it is pertinent to examine some of the intricacies of the process and the context.

The question matters

It is typical of a referendum to ask narrow and precise questions of the “yes-no” type. The wording of the statement put forth for a popular vote is of cardinal significance. Judging from the incessant exchange of proposals on the technicalities of an agreement, and the eventual collapse of those efforts, it can be assumed that the question will amount to something like this:

Q1: Do you accept the bailout programme offered by the institutions?

It could always be something along the lines of “do you want further austerity”, “do you want to stay in the euro” and the like. Yet, these sort of nuanced statements offer too broad a scope for interpretation, let alone their susceptibility to abuse: they can be phrased in ways that foster circular reasoning, a standard case of petitio principii. Here is an example of such fallacious questioning:

Q2: Do you accept austerity, in order to keep the euro?

The first part of the sentence is vague/abstract, while the second is more concrete. The focus eventually turns towards the latter, skewing the result in favour of the initial point: “accept austerity”. Another way to beg the question, is to picture the proposal as utterly repulsive and odious:

Q3: Do you submit to Europe's ultimatum, in order to keep the euro?

No one wants to accept an ultimatum so the expected answer is a resounding “No”.

Such pedantic matters notwithstanding, the gist is that the actual question matters a great deal. I want to believe it will be confined to whatever is responsible to ask, narrowed down to the bailout package as such. Thus, a question akin to Q1.

Democratic norm

A referendum is considered a major instance of democracy. All citizens are called to vote directly on a given topic. In cases such as Greece’s present predicament, it is preferable to hold a referendum than proceed without one, so that the will of the people becomes clearer in the face of growing uncertainty.

I would however be a bit more cautious than the typical panegyrist of “direct democracy”, for a very specific reason that is germane to a referendum: the totality of citizens is brought before a fait accompli, they had no direct input in the process leading to the end question, nor do they even participate in the very formulation of said question.

That aside, the implicit proposition of Mr. Tsipras’ decision is that governments in this negotiation process have the right to call for a referendum whenever they see it fit. Should, say, Germany hold a popular vote to decide whether to keep bailing out Greece? Was any body of citizens ever asked to vote in a referendum for baling out Greece in the first place?

What I’m trying to suggest is that normative propositions have universal validity. One needs to be careful with them. They cannot hold true for Greece, but be false for all the rest. By the by, this applies to the narrow-sighted claim of members of the Greek government for EU partners to “respect democracy in Greece”, as if the other EU/Euro member-states have no democratically accountable governments.

The NO vote

In principle, the bailout programme and euro membership are two distinct things. One does not necessitate the other. A negative vote on the programme does not necessarily imply a positive vote for a national currency, which would entail an exit from the Euro area and, perhaps, the EU.

However, if it is indeed the case that there is no alternative to the creditors’ proposal, then the options are drastically narrowed down to a Grexit or whatever contingency plan may be in the works. It is pointless to speculate on the substance of the latter—we’ll soon find out. What can be posited at this point is that an ad hoc regime, the troika/the institutions, would be substituted by yet another dubious setup.

Legal perplexities notwithstanding, a negative vote will put a decisive end to the Greece-EU relations as we have come to know them over the course of these last few years. That probably means a turn for the worse, at least on the economic front.

Tsipras’ predicament

Prime Minister Tsipras is caught in an impossible situation. He was elected on the basis of putting an end to “austerity” which, according to the Syriza interpretation of the term, boils down to making no further cuts to government spending. He just could not violate his red lines in this negotiation, otherwise he would lose his credibility and appeal as a radical leftist; a leftist who implements “neoliberal” policies has no political future.

I would contend that Mr. Tsipras himself is a pragmatist. By his party’s standards, he may also be considered a moderate. Even if his own political idiosyncrasy would enable him to accept the terms of the creditors, he would have to face staunch opposition at home, starting from the more radical deputies that support his government.

Syriza is not a monolithic whole. It is a coalition of radical leftist tendencies. While this could be a strength in a different context, a functioning form of plurality, the current conditions render it more of a liability.

If Mr. Tsipras were to agree on imposing further austerity on the Greek people—tax hikes constitute cuts to disposable income—he would be running the risk of losing the support of those on his left or even having to part ways with ANEL, his government’s junior coalition partner. At any rate, the government, as it currently stands, would come under pressure, with the possibility of imploding or being forced into a reshuffle.

Mr. Tsipras is caught between a rock and a hard place. By shifting the burden of the decision to the Greek citizens, he avoids making the politically toxic judgement call. In a sense, this was the only course of action he could pursue, given how he navigated through the negotiations over these last months. Whether that was responsible or not, is another discussion altogether.

Power politics

To be fair, while there is a kernel of truth to the claim that Mr. Tsipras—the Greeks—brought all this upon themselves, we must not remain oblivious to the fact that the deliberations at the supra-national level are a test over which ideology reigns supreme in the EU/Euro area.

That the very substance of an ostensibly technical arrangement is determined at an inter-governmental level, suggests that there are other variables to be considered beyond the Greek case (read my previous article about the quasi-confederal decision-making framework).

An example is the political calculation of not giving in to Syriza’s demands in order not to encourage other governments to question the substance of the establishment’s policies. That applies to other radicals seeking power, as well as to incumbent political leaders, such as France’s and Italy’s, that would seize the opportunity to renegotiate the fiscal order.

Greece has a lot of problems. The Greeks are as fallible as everyone else. That the current state of affairs is about supremacy in Europe—about which economic-institutional mentality prevails—does not mean that either Prime Minister Tsipras or any other Greek politician is absolved from their responsibilities.

As for the bailout programme being a purely technical arrangement, that is a misrepresentation of the case. The Eurogroup is political to the core, as is the underlying value system of the policies entailed in the various reform programmes.

No good option

We will all be in a better position to evaluate the situation as things unfold. We have yet to see concrete reactions to Prime Minister Tsipras’ call. Will the “institutions” retract from their latest position and accept Greece’s proposals in an effort to prevent the referendum from ever taking place? There may yet be more drama to be played.

Still, I remain committed to the claim I made in my last article:

Though the exact conclusion to this extended story is open to speculation, the afore-outlined political order clearly lacks the potentiality for delivering a truly optimal outcome. What exists in the realm of probability are states of affairs ranging from bad to calamitous.

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